Indian Rupee strong against every currency, RBI intervened in markets: Sitharaman tells Lok Sabha

New Delhi: Union Finance Minister Nirmala Sitharaman on Monday reiterated that the Indian currency Rupee has been strong among other major currencies.

Replying to a question in Lok Sabha, Sitharaman said the Reserve Bank of India has used the available foreign exchange reserves that it had in order to intervene in the markets to make sure that the Dollar-Rupee does not fluctuate too much.
“The Indian Rupee has been strong against every currency. Reserve Bank has used foreign exchange reserves that it has to intervene in the market to make sure that the Dollar-Rupee fluctuation does not go too much,” Sitharaman said.

Typically, the RBI from time to time intervenes in the markets through liquidity management, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee. Last week, World Bank too maintained that the Rupee fared relatively well in 2022 in comparison to other emerging market peers.

A senior World Bank economist Dhruv Sharma said last Tuesday, the day when it revised India’s GDP forecast to 6.9 per cent from earlier 6.5 per cent, said: “The Rupee has depreciated just about 10 per cent over the course of this year. That might sound like a large number, but relative to many other emerging market peers, India hasn’t fared that badly.”

For the record, the rupee has come substantially off its all-time low. Currently, it is trading around 82.0 against the US Dollar as against a record low of 83 it breached in mid-October.

Tightening monetary policy by the US Federal Reserve and central banks in other advanced economies had earlier triggered the depreciation of the Indian currency. An increase in policy rates in the US and other advanced economies typically leads to a depreciation of the Rupee.